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GAHC010128482022

THE GAUHATI HIGH COURT

(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

Case No. : WP(C)/4398/2022

MUKTI NATH RAI

S/O LATE SRI RAI, R/O RQAI BAHADUR LANE, P.O. AND P.S.-JORHAT, DIST-

JORHAT, ASSAM, PIN-785001

VERSUS

THE EXECUTIVE DIRECTOR, FOOD CORPORATION OF INDIA AND 8 ORS

ZONAL OFFICE, NORTH EAST, ULUBARI, 6TH FLOOR, G.L. PUBLICATION

BUILDING, GUWAHATI, ASSAM

2:THE DISTRICT MANAGER

FOOD CORPORATION OF INDIA

DISTRICT OFFICE

GUWAHATI

3:THE SENIOR REGIONAL MANAGER

FOOD CORPORATION OF INDIA

REGIONAL OFFICE

ASSAM REGION

ULUBARI

G.S. ROAD

GUWAHATI-781007

ASSAM

4:THE GENERAL MANAGER

FOOD CORPORATION OF INDIA

REGIONAL OFFICE

PALTAN BAZAR

GUWAHATI-781008

ASSAM

5:THE DISTRICT MANAGER

FOOD CORPORATION OF INDIA

DISTRICT OFFICE Page No.# 1/25

GAHC010128482022

THE GAUHATI HIGH COURT

(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

Case No. : WP(C)/4398/2022

MUKTI NATH RAI

S/O LATE SRI RAI, R/O RQAI BAHADUR LANE, P.O. AND P.S.-JORHAT, DIST-

JORHAT, ASSAM, PIN-785001

VERSUS

THE EXECUTIVE DIRECTOR, FOOD CORPORATION OF INDIA AND 8 ORS

ZONAL OFFICE, NORTH EAST, ULUBARI, 6TH FLOOR, G.L. PUBLICATION

BUILDING, GUWAHATI, ASSAM

2:THE DISTRICT MANAGER

FOOD CORPORATION OF INDIA

DISTRICT OFFICE

GUWAHATI

3:THE SENIOR REGIONAL MANAGER

FOOD CORPORATION OF INDIA

REGIONAL OFFICE

ASSAM REGION

ULUBARI

G.S. ROAD

GUWAHATI-781007

ASSAM

4:THE GENERAL MANAGER

FOOD CORPORATION OF INDIA

REGIONAL OFFICE

PALTAN BAZAR

GUWAHATI-781008

ASSAM

5:THE DISTRICT MANAGER

FOOD CORPORATION OF INDIA

DISTRICT OFFICE

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BONGAIGAON

ASSAM

6:THE DISTRICT MANAGER

FOOD CORPORATION OF INDIA

DISTRICT OFFICE

JORHAT

ASSAM

7:THE DISTRICT MANAGER

FOOD CORPORATION OF INDIA

DISTRICT OFFICE

KOKRAJHAR

ASSAM

8:THE ASST. GENERAL MANAGER

FOOD CORPORATION OF INDIA

REGIONAL OFFICE

PALTAN BAZAR

GUWAHATI-781008

ASSAM

9:UNION OF INDIA

REPRESENTED BY DEPARTMENT OF FOOD

SUPPLIES AND CONSUMER AFFAIRS

NEW DELH

Advocate for the Petitioner : MR A C BORBORA

Advocate for the Respondent : SC, F C I

BEFORE

HON’BLE MR. JUSTICE SUMAN SHYAM

Date of hearing : 30.08.2022.

Date of judgment : 14.09.2022.

JUDGMENT & ORDER (CAV)

Heard Mr. A. C. Borbora, learned senior counsel assisted by Mr. M. Smith,

learned counsel appearing for the writ petitioner. I have also heard Mr. P. K. Roy,

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learned senior counsel assisted by Ms. A. Chakraborty, learned counsel appearing for

the respondents (FCI).

2. The instant writ petition has been filed with a prayer to enforce the legal rights

of the petitioner by issuing a direction upon the respondents (FCI authorities) to

release the security deposit and the unpaid bills of the petitioner together with

interest without any further delay. The facts and circumstances, giving rise to the filing

of the writ petition, as projected through the pleadings, are briefly stated herein

below.

3. Pursuant to a process of competitive bidding, the writ petitioner was

appointed as a transport contractor under the FCI for a period of two years, i.e.

during 28.03.1985 to 27.03.1987, in respect of three different routes. The appointment

letters and the routes assigned to the petitioner are 1) “Ex-New Bongaigaon Railway

Station to FSD Dimapur by Letter dated 28-031985”, 2) “Ex-Barua Bamungaon to

FSD Golaghat by Letter dated 12-12-1984” and 3) Ex- FSD Dergaon to FSD Dimapur by

Letter dated 09-08-1985”. For the purpose of executing the aforementioned

transportation contracts the petitioner had deposited an amount of Rs 1,84,250/- as

security deposits with the respondent authorities and started execution of the works.

Accroding to the writ petitioner he had transported 44 truck load of rice to the

Dimapur godown of the FCI. However, 26 trucks of foodgrains transported by the writ

petitioner were not received by the Depot Manager of FCI at Dimapur due to non-

availability of godown space. Situated thus, the petitioner had to store the food items

in a private godown and thereafter, issue a letter intimating the respondents about

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the matter with a request to take possession of the transported goods but to no avail.

The petitioner has alleged that instead of taking delivery of the 26 truck load of rice

bags, the respondents had terminated all the three transportation contracts and

instituted Money Suit No 20/2007 in the court of Civil Judge (Senior Division) Jorhat for

recovery of an amount of Rs 11,88,393 /-from the petitioner and his agent. That apart,

the respondents had also lodged a criminal complaint against the petitioner and his

agent Akhil Bhowal which was registered and numbered as BGR Case No.209 /1986

u/s 406 of the IPC. After the dismissal of the above proceedings, the petitioner had

submitted several representations and also sent a legal Notice to the respondents

demanding release of the security deposit and outstanding contractual dues

amounting to Rs.3,80,299.98 along with interest but till date the amount has not been

released. Hence, this writ petition.

4. The respondent nos.1 to 8 have filed a joint counter–affidavit questioning the

maintainability of the writ petition inter-alia contending that the petitioner’s claim is

barred by time and this being a very old case, records pertaining to the transactions

were also not available with the department.

5. By referring to the materials available on record, Mr. Borbora, learned senior

counsel for the petitioner has submitted that the petitioner did not violate the

contract agreement at any point of time so as to forfeit his contractual dues. That

apart, after the dismissal of Money Suit No.20/1987 filed by the FCI for recovery of

money claimed from the petitioner and on dismissal of the appeal as well as the SLP

preferred by the FCI, there was no ground whatsoever for the respondents to sit over

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the pending bills of the petitioner. Mr. Borbora has also invited the attention of this

Court to the order dated 10.07.1992 passed by the learned Chief Judicial Magistrate,

Bongaigaon in connection with BGR Case No.290/1986 to contend that even the

criminal proceeding registered against the petitioner under Section 407 of the IPC

was dropped by learned Judicial Magistrate on the ground that there was no prima

facie material to proceed in the matter. Under the circumstances and in view of the

categorical admission made in the communication dated 02.04.2019 issued by the

respondent No.8 addressed to the respondent No.1 recommending release of

security deposit and pending bills of the petitioner, there was no justifiable ground for

the respondents to with-hold the amount due and payable to the petitioner.

6. Mr. Borbora has also submitted that the petitioner is suffering from various

ailments including the dreaded disease of cancer and therefore, he is in urgent need

of money for the purpose of availing medical treatment. As such, a writ of mandamus

be issued directing the respondents to release the amount due and payable to the

writ petitioner along with interest. In support of his argument for payment of interest,

Mr. Borbora has relied upon a decision of the Supreme Court of India rendered in the

case of Union of India and others vs. M/S. Willowood Chemicals Pvt. Ltd. & another

[Civil Appeal Nos.2995-2996 of 2022] to contend that since there is neither any

statutory bar nor any clause in the contract agreement prohibiting payment of

interest, hence, taking note of the peculiar facts and circumstances of the case, a

direction may be issued to the respondents to pay reasonable interest on the unpaid

dues of the petitioner.

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7. Opposing the submissions advanced by the petitioner’s counsel, the learned

senior counsel appearing for the respondents Mr. P. K. Roy, has argued that on

account of failure on the part of the petitioner to deliver the goods at the FSD

Dimapur, the contract had been terminated. Since, the petitioner has not challenged

the order of termination of contract which is the basic order, he cannot question the

consequential action on the part of the respondents in not releasing the security

deposit and the outstanding bills. It is also the submission of Mr. Roy that since it is a

very old matter and the petitioner has failed to pursue his claim by making a counter-

claim in the civil suit seeking a decree for recovery of the amount claimed in this

petition, there is no scope for this Court to grant relief to the petitioner in exercise of

writ jurisdiction.

8. Mr. Roy has also vociferously opposed the prayer for grant of interest on the

outstanding dues by contending that there is no such provision in the contract

agreement for payment of interest. Moreover, the petitioner has also failed to offer

proper explanation for the delay in approaching this Court. In support of his above

arguments Mr. Roy has relied upon the following decisions:-

1) State of Madhya Pradesh vs. Bhailal Bhai and others [(1964) 6 SCR 261].

2) Sethi Auto Service Station and others vs. Delhi Development Authority

and others [(2009) 1 SCC 180].

3) Edukanti Kistamma (Dead) thr. Lrs. and others vs. S. Venkatareddy

(Dead) thr. Lrs. and others [(2009)1 SCC 756].

9. I have considered the submissions advanced by the learned counsel for both

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the parties and have also gone through the materials available on record.

10. The basic facts of the case are more or less admitted. It is the admitted

position of fact that pursuant to a tender process the petitioner was awarded the

contract by the FCI for transportation of foodgrains for a period of two years. In

execution of the aforesaid contracts, the petitioner had transported 44 trucks filled

with bags of rice to Dimapur FSD out of which, 26 trucks loaded with rice valued at

Rs.11,88,393/- could not be delivered by the petitioner at the FSD Godown at

Dimapur. It is also the admitted position of fact that on 23.02.1987 the FCI had filed

Money Suit No.20/1987 before the court of Civil Judge (Senior Division) at Jorhat

praying for a decree for recovery of an amount of Rs.11,88,393/- for alleged breach

of the transportation contract by the writ petitioner due to his failure to deliver the 26

trucks of rice bags at the FCI godown at Dimapur. However, the suit was dismissed by

the learned Civil Judge by the judgment and order dated 11.08.1999. RFA

No.102/1999 preferred by the FCI before this Court against the judgment dated

11.08.1999 was dismissed for non-prosecution, on 12.09.2006 and thereafter,

restoration petition filed by the FCI with a prayer to condone the delay of 1061 days

was also dismissed by order dated 09.02.2011 passed by this Court. It appears that

being aggrieved by the order dated 09-02-2011, the FCI had preferred a Special

Leave Petition before the Supreme Court which was also dismissed. Although there is

no document brought on record by either side to indicate the date of dismissal of

the SLP, yet, it appears that SLP No.18820/2011 preferred by the FCI against the order

dated 09.02.2011 passed by this Court in Misc. Case No.2469/2009 arising out of RFA

No.102/1999 was dismissed by the Hon’ble Supreme Court on 29.07.2011.

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11. It also appears from the materials on record that based on a complaint

lodged by the FCI, BGR Case No.209/1986 was registered against the petitioner and

his agent under Section 407 of the IPC. However, at the stage of framing of charge,

the learned Chief Judicial Magistrate, Bongaigaon had passed an order dated

10.07.1992 discharging the petitioner with an observation that there was no material

to proceed against him under Section 407 of the IPC.

12. I also find from the materials available on record that on 09-12-2008, the writ

petitioner had submitted a representation before the respondent No 3 requesting for

release of his contractual dues with interest amounting to Rs 1,50,39,039.65/-. Along

with the said representation, the petitioner had submitted a statement of claim

indicating that a sum of Rs 3,80,299.98 being the principal amount was due and

payable to him. Thereafter, the petitioner had submitted another representation

dated 09-04-2013 before the respondent No. 3 renewing his claim. On 25-02-2014, the

Assistant General Manager (Cont) i.e. the respondent No.8 had issued a letter to the

petitioner asking him to furnish relevant records lying with him pertaining to the

contract with the FCI for processing the matter for release of his dues lying with the

FCI. In the letter dated 25-02-2014, it was specifically mentioned that the same was

issued with the approval of the Competent Authority. The petitioner has categorically

averred in paragraph 14 of the writ petition that in terms of the letter dated 25-02-

2014, he had submitted all relevant documents in respect of the contracts in

question. The said statement made in the writ petition has not been denied or

disputed by the respondents in the counter-affidavit.

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13. It also appears from the materials brought on record that on 09.08.2016 the

petitioner had submitted an appeal before the Chairman, Grievance Redressal Cell

(GRC), Zonal Office, North East, with a prayer for release of the security deposit and

unpaid bills along with interest totaling to Rs.4 Crores 6 Lakhs. It appears from the

documents available on record that the petitioner had claimed interest on the

unpaid dues at different rates varying between 14.25% to 17.25%. The said

representation was followed by a Legal Notice sent on behalf of the petitioner on

16.10.2017 demanding release of payment of a sum of Rs.4 Crores 6 Lakhs being the

security deposit, outstanding bills as well as interest accruing on the said amount. It

appears that on receipt of the aforesaid communications from the petitioner, the

matter was examined by the respondents whereafter, the Assistant General Manager

(Cont.) i.e. the respondent No.8 acting on behalf of the General Manager (Region)

had addressed a letter dated 02.04.2019 to the respondent No.1 inter-alia

recommending the release of security deposit and pending bills of the contractor but

without interest. In the said letter, it has been mentioned that the security deposit

pertaining to the contract was Rs.87,000/-. However, it has also been mentioned that

in so far as the pending bills are concerned, no details was available on record. The

operative part of the letter dated 02.04.2019 appearing in paragraph 9 is reproduced

herein below for ready reference :-

“9. Zonal Grievance Redressal Cell has directed GM(R) Assam for issuance

of Speaking Order in respect of the said case and accordingly the same is

being prepared and the same is submitted to ZO GRC for final settlement of

the case.

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In light of the above stated facts and direction of Court, it is

recommended to approve the release of the Security Deposits and the

Pending Bills of the said Contractor without any interest subject to credit

availability/availability of necessary reconciliation to meet the ends of justice &

subject to approval of ZO (NE).”

14. From the letter dated 02-04-2019 issued by the respondent No. 8 what is

apparent is the fact that there is not only a clear acknowledgement of the

contractual dues of the petitioner but there is also a recommendation for releasing

the payments. Although the amount of security deposit has been indicated as Rs

87,000/- only, yet, it is evident from the communication dated 0204-2019 that the

same relates to only one of the contracts i.e. “Ex- New Bongaigaon to FSD Dimapur”

awarded vide order dated 28-03-1985. The objection, if any, was only on account of

claim for payment of interest which was declined without, however, assigning any

proper reason. From the tenor of the stand taken by the respondents it appears that

despite the judgment dated 11.08.1999 passed by the civil court, they were still

treating the petitioner as a defaulter in execution of the transportation contract.

15. In the above context, it would be pertinent to note herein that in the judgment

dated 11.08.1999 passed by the learned civil court in Money Suit No.20/1987, finding

of facts have been recorded to the effect that the District Manager, Dimapur had

received only 18 trucks loaded with foodgrains from the petitioner but he had refused

to receive the balance 26 trucks loaded with rice on the ground of lack of storage

space. The petitioner (contractor) had made repeated requests to the District

Manager, Dimapur to receive the 26 trucks loaded with rice but in vain.

Consequently, the petitioner had to arrange for a private godown at his own

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expenses so as to save the foodgrains from being damaged. The petitioner had also

written a letter to the Senior Manager, FCI, Guwahati dated 04.09.1985 intimating him

about the matter along with a request to do the needful to save the foodgrains.

Accordingly, the Regional Manager had also sent a telegram dated 03.05.1986 to the

petitioner with a direction to deliver the goods to the Manager, FCI, Dimapur.

However, when the petitioner showed the telegram to the District Manager, FCI,

Dimapur and requested him to take delivery of the foodgrains, he had refused to do

so by stating that he was not obliged to comply with the direction of the Regional

Manager, Guwahati without the direction from the Regional Manager, Shillong. The

petitioner had then sent a letter dated 20.05.1986 addressed to the Senior Manager,

Guwahati informing him about the matter which was also acknowledged by the

Senior Regional Manager by his letter dated 28.08.1986. Taking note of the aforesaid

materials brought on record, the learned trial court had observed that the defendant

(i.e. the writ petitioner) could not deliver the foodgrains at the FCI Dimapur Godown

due to refusal by the District Manager, Dimapur to receive the same on the ground of

non-availability of space and also for non-receipt of any direction from the Regional

Manager, Shillong under whom he was working. Accordingly, the learned Civil Judge

had decided the issue Nos.6, 7 and 8 against the respondents/plaintiffs (FCI) by

holding that there was no negligence on the part of the contractor and therefore, it

cannot be said that the contractor i.e. the writ petitioner had violated the terms and

conditions of the contract. On the basis of such findings and conclusions the Money

Suit was dismissed.

16. The judgment and order dated 11.08.1999 was not interfered with by this Court

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as well as the Hon’ble Supreme Court. Therefore, the aforesaid judgment of the Civil

Court has attained finality in the eye of law. As such, it would have a binding effect

qua the partied in the Money Suit. In view of the verdict of the Civil Court on Money

Suit No 20/2007 instituted by the FCI, it was evident that by necessary implication, the

termination of the transportation contracts entered into by the FCI with the petitioner

on the ground of non-delivery of 26 truck load of rice at the FSD Dimapur stood in-

validated. In other words, the learned Civil Court had rejected the plea of the FCI

that the petitioner had acted in breach of the contract agreement by failing to

deliver the rice bags at the Dimapur godown of the FCI. Rather, the Civil Court has

held that it was the Depot Manager of FCI who had failed to receive the items when

sought to be delivered by the petitioner. Under the circumstance, it was not open for

the respondents to with-hold the contractual dues of the writ petitioner on the ground

of breach of contract.

17. It may be correct to say that the petitioner had the opportunity to file a

counter-claim in the Money Suit for recovery of his contractual dues which he had

failed to do. However, such failure on the part of the petitioner by itself would not

precluded him from agitating his grievance before the appropriate forum at a

subsequent stage if there is a proper cause of action to do so. The use of the

expression “may” in Order VIII Rule 6-A of the Code of Civil Procedure makes it amply

clear that filing of a counter-claim by the defendant in a suit was optional. Therefore,

I am un-able to agree with the submission of Mr. Roy, learned senior counsel for the

respondent Nos.1 to 8, that the claim of the petitioner would stand extinguished

under the law merely on account of his failure to lodge a counter-claim in Money Suit

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No 20/1987.

18. In so far as the plea of the petitioner’s claim being barred under the law of

Limitations is concerned, this court finds that the core issue arising for decision of the

Civil Court in Money Suit No 20/1987 was as to whether the writ petitioner was liable

for breach of contract due to non-delivery of the rice bags at the Dimapur FCI

godwon. Until such time the aforesaid issue was decided by the Civil Court, there was

no scope for the petitioner to assert his claim for payment of the out –standing

contractual dues. After the dismissal of suit as well as the appeals preferred by the

FCI, the petitioner had not only submitted representations dated 09-04-2013 but had

also served a legal Notice on the respondents on 16-10-2017. Not only that, the

petitioner had also submitted an appeal before the Chairman of the Grievance

Redressal Cell of the FCI. Thereafter, the respondent No. 8 had issued the letter dated

02-04-2019 virtually acknowledging the debt of the petitioner. A copy of the letter

dated 02-04-2019 was also marked to the petitioner. The above facts go to show that

the petitioner was not only pursuing the matter by making repeated representations

before the authorities but even the respondents had conveyed to him that they were

processing his claim for release of the dues but without payment of interest. Be that as

it may, law is fairly well settled that the writ jurisdiction exercised by the High Court

under Article 226 of the Constitution of India is extra-ordinary, equitable and

discretionary in nature and can be invoked for enforcement of fundamental and

legal rights of the citizens. By various judicial pronouncements it has been held that

Article 226 of the Constitution does not admit of any limitations on the powers of the

High Court. The jurisdiction of the High Court under Article 226 is plenary and can be

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exercised for doing complete justice to the parties after taking note of the facts and

circumstances of the case.

19. In the case of Ajay Hasia vs Kahlid Mujib Sehravardi reported in (1981)1 SCC

722 a Constitution Bench of the Supreme Court has held that any arbitrary or un-

reasonable action of an ‘ authority ‘ under Art 12 of the Constitution would be

violative of fundamental rights guaranteed under Article 14 of the Constitution.

20. Again, in the case of Kumari Shreelekha Vidarthi and others vs State of U.P.

and others reported in (1991) 1 SCC 212 the Apex Court has held that every arbitrary

action of the State would be open to challenge on the ground of violation of Article

14.

21. In the case of Union of India and another vs. S. B. Vohra and others reported in

(2004) 2 SCC 150 the Supreme Court has discussed the principles of judicial review

and has observed that judicial review is considered to be a basic feature of the

Constitution. It was held that the High Court, in exercise of its power of judicial review

would zealously guard the human rights, fundamental rights and legitimate

expectations of the citizens. In that case, it was further observed that although it was

not possible to lay down standards exhaustively as to in what situation a writ of

mandamus will issue and in what situation it will not, it will depend on the discretion of

the Court as well as the law which governs the field.

22. In the case of Smt. Sudama Devi vs. Commissioner and others reported in

(1983)2 SCC 1 the Supreme Court has held that there is no period of limitation

prescribed by any law for filing a writ petition under Article 226 of the Constitution.

However, in every case it would have to be decided on the facts and circumstances

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of the case as to whether, the petitioner is guilty of laches but that would have to be

done without taking into account any specific period as period of limitation. The

Supreme Court has also observed that there may be cases where even short delay

may be fatal while there may be cases where even a long delay may not be

evidence of laches on the part of the petitioner.

23. In another decision rendered in the case of Bangalore City Cooperative

Housing Society Ltd. vs. State of Karnataka and others reported in 2012 (3) Supreme

209 a similar view has been expressed by the Supreme Court by holding that there is

no period of limitation for filing petitions under Articles 32 and 226 of the Constitution.

However, the petitioner should approach the court without loss of time and if there is

delay then cogent explanation should be offered for the same.

24. From the aforesaid decisions of the Supreme Court, what crystallizes is that

there is no strict application of the law of limitation in case of a writ petition filed

under Article 226 of the Constitution. However, in case of delay or laches on the part

of the petitioner, the Writ Court will have to examine the matter on the basis of

peculiar facts and circumstances of the case before invoking a discretionary

jurisdiction.

25. Coming to the facts of this case, there is no wrangle at the Bar that the Food

Corporation of India (FCI) was established under the Food Corporation of India Act,

1964 and therefore, the Government of India has deep and pervasive control over

the FCI. As such, FCI is an ‘authority’ within the meaning of Article 12 of the

Constitution of India. It is also not in dispute that the petitioner had in fact executed

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the work but his contractual dues had not been cleared till date. Even assuming that

the respondents had some valid ground to withhold the payments due to the

petitioner during the pendency of the Money Suit, yet, after the dismissal of the suit,

the said ground had also become non-existent. In any view of the matter, after the

termination of the Criminal Proceeding on 10-07-1992 and dismissal of the SLP on 29-

07-2011, there was no legitimate ground, what so ever, available to the respondents

to withhold the payments due to the petitioner. Notwithstanding the same, the

contractual dues of the petitioner were not released. Since there is specific finding of

fact by the Civil Court, as referred to above, that the petitioner had in fact executed

the contract and delivered the food grains at the FSD at Dimapur but it was the

District Manager of FCI at DImapur who had refused to receive the goods contained

in those 26 trucks, it cannot be said that the writ petitioner is guilty of breach of

contract. Situated thus, I am of the unhesitant opinion that this is not a case where

there is a bona fide contractual dispute between the FCI and the petitioner. Rather, it

is a clear case of arbitrary and high handed action on the part of the respondents

wherein they have illegally withheld the payments due to the petitioner for the work

executed by him. The respondent Nos.1 to 8 have acted in a highly arbitrary and

illegal manner in refusing to release the outstanding contractual dues of the

petitioner which he was legitimately entitled to receive from the FCI authorities

against the contractual works executed by him even after acknowledging his claim.

In view of the above, violation of petitioner’s fundamental right under Article 14 of the

Constitution is self evident from the circumstances of the case.

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26. In the writ petition the petitioner has categorically stated that the amount of

unpaid dues along with security deposit stood at Rs.3,80,200/- at the relevant point of

time. The aforesaid amount is also reflected in the statement of claim annexed to the

representation dated 09.12.2008 submitted by the petitioner before the Senior

Regional Manager seeking release of his outstanding dues. There is no specific denial

of the said assertion of the petitioner in the counter-affidavit filed on behalf of the

respondent Nos.1 to 8. As a matter of fact despite the order dated 24.08.2022 passed

in this case indicating that the writ petition will be taken up for expeditious disposal,

the respondents have not replied to the petitioner’s claim on merit in the counter

affidavit filed by them. The writ petition was also taken up for final disposal with the

consent of both the sides. In view of the above, this court is of the considered opinion

that the amount of Rs.3,80,200/- claimed by the petitioner as the principal amount

can be treated to be the admitted amount.

27. This court has also taken note of the fact that the petitioner has been suffering

from some very serious ailments as a result of which he is in urgent need of money for

medical treatment. Such assertion of the petitioner has also not been disputed by the

respondents. Taking note of the peculiar facts of the case, this court is of the view

that it is not an ordinary case of money claim but a clear case where the petitioner

has been subjected to undue harassment and arbitrary treatment at the hands of the

authorities thereby denying his legitimate expectation. Under the circumstances, if

the respondent Nos.1 to 8 are allowed to with-hold the contractual dues of the

petitioner any further, then such an action of the respondents would not only be

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confiscatory in nature but the same would also amount to un-just enrichment of the

respondents at the cost of the petitioner. Therefore, this court is of the opinion that a

writ of mandamus directing the respondents to release the principal amount of

Rs.3,80,200/- would lie in the facts of this case.

28. Coming to the next issue raised in this writ petition regarding award of interest

on the unpaid bills of the petitioner, the learned counsel for the respondents has

failed to draw the attention of this court to any condition in the contract which

prohibits award of interest. As has already been observed, the facts of this case are

very special and therefore, the relief for award of interest made by the petitioner has

to be considered in the factual back drop of the case.

29. Section 3 of The Interest Act, 1978 confers discretionary power on the court to

award interest in a proceeding for recovery of any debt, at a rate not exceeding the

current rate of interest. Section 34 of the Code of Civil Procedure also confers

discretionary jurisdiction on the Civil Court to award interest on the principal sum in a

decree for payment of money at such rate as the court may deem reasonable.

Taking note of the aforesaid provisions of law, the Supreme Court, in a decision

rendered in the case of Tahazhathe Purayil Sarabi vs. Union of India reported in

(2009)7 SCC 372 has observed as follows :-

“17. The Courts are consistent in their view that normally when a money

decree is passed, it is most essential that interest be granted for the period

during which the money was due, but could not be utilized by the person in

whose favour an order of recovery of money was passed. As has been

frequently explained by this Court and various High Courts, interest is essentially

a compensation payable on account of denial of the right to utilize the money

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due, which has been, in fact, utilized by the person withholding the same.

Accordingly, payment of interest follows as a matter of course when a money

decree is passed. The only question to be decided is since when is such interest

payable on such a decree. Though, there are two divergent views, one

indicating that interest is payable from the date when claim for the principal

sum is made, namely, the date of institution of the proceedings till the recovery

of the amount, the other view is that such interest is payable only when a

determination is made and order is passed for recovery of the dues. However,

the more consistent view has been the former and in rare cases interest has

been awarded for periods even prior to the institution of the proceedings for

recovery of the dues, where the same is provided for the terms of the

agreement entered into between the parties or where the same is permissible

by statute.”

30. In the case of M/S. Willowood Chemicals Pvt. Ltd. and another (supra) relied

upon by Mr. Borbora the Hon’ble Supreme Court had taken note of the divergent

views expressed in the case of Union of India and others vs. Orient Enterprise and

another reported in (1998) 3 SCC 501 observing that the relief of payment of interest

on delayed refund would not be maintainable and also the view expressed in the

case of Godavari Sugar Mills Ltd. vs. State of Maharashtra & others reported in (2011)

2 SCC 439 wherein it was held that relief for payment of interest made in a writ

petition will be maintainable. The Supreme Court has expounded the law by making

the following observations:-

“18. Coming back to the present cases, the relevant provision has prescribed

rate of interest at 6 per cent where the case for refund is governed by the

principal provision of Section 56 of the CGST Act. As has been clarified by this

Court in Modi Industries Ltd. and Godavari Sugar Mills Ltd. wherever a statute

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specifies or regulates the interest, the interest will be payable in terms of the

provisions of the statute. Wherever a statute, on the other hand, is silent about

the rate of interest and there is no express bar for payment of interest, any

delay in paying the compensation or the amounts due, would attract award of

interest at a reasonable rate on equitable grounds. It is precisely for this reason

that paragraph 9 of the decision in Godavari Sugar Mills Ltd. accepted the

submission made by the learned counsel for the respondents and confined the

rate of interest to the prescription made in the statute. The award of interest at

a rate in excess of what was prescribed by the statute was only for a period

beyond 20 years where the matter was not strictly covered by the stature and

as such it would be in the realm of discretion of the Court. It must also be noted

here that the inordinate delay of up to 17 years in making refunds was a

special circumstance when this Court was persuaded to accept grant of

interest at the rate of 9 per cent per annum in Sandvik Asia Ltd. Even while

doing so, the observations made by this Court in Paragraph 48 of the decision

are quite clear that “the award of interest in refund and amount must be as

per the statutory provisions of law and whenever a specific provision has been

made under the statute such a provision has to govern the field.” The

subsequent decision of the bench of three Judges in Gujarat Fluoro Chemicals

noticed that the grant of interest at the rate of 9 per cent was in the facts of

the case in Sandvik Asia Ltd.”

31. Coming to the facts of this case, it is apparent that after 29.07.2011, except for

raising some technical plea on the question of maintainability of the writ petition, no

justifiable ground has been shown by the respondents for not releasing the payments

due to the petitioner. Although the respondent’s counsel has submitted that the

relevant records had been misplaced and hence the delay, yet, I find that all

documents were furnished by the petitioner after the receipt of the letter dated 25-

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02-2014 issued by the respondent No. 8. There is, however, no explanation as to why

the payments could not be processed based on such documents and despite the

letter dated 02-04-2019. Therefore, it is evident that there has been deliberate and un-

explained delay on the part of the respondents in processing the payments due to

the petitioner as a result of which, the writ petitioner has been made to suffer. If that

be so, there cannot be any doubt or dispute about that fact that the petitioner

would be entitled to some compensation from the respondents Nos.1 to 8 in the form

of interest. The only question would be the date from which and the rate at which

such interest is to be awarded.

32. After a careful examination of the materials available on record, this court

finds that the work was executed by the petitioner nearly 35 years back and

therefore, this is undoubtedly a very old matter. However, it is also evident from the

materials available on record that the FCI has initiated both civil and criminal

proceedings against the petitioner in the form of Money Suit No.20/1987 as well as

BGR Case No.209/1986. In both these proceedings the FCI took a plea that by failing

to deliver the rice bags the petitioner was liable to be proceeded against for breach

of contract. Therefore, during the pendency of these proceedings, save and except

filing a counter-claim in Money Suit No.20/1987 there was practically no scope for the

petitioner for instituting any other proceeding before any forum for recovery of his

contractual dues.

33. Be that as it may, after the dismissal of the SLP on 09.02.2011 the proceedings

initiated by the FCI against the writ petitioner pertaining to the transportation

contracts had evidently come to an end. Therefore, there was no hindrance on the

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part of the petitioner to institute any legal proceeding against the FCI for recovery of

his contractual dues. However, it appears from the materials available on record that

save and except submitting some representations and appeal before the FCI

authorities, the writ petitioner did not take any step for institution of any legal

proceeding until 24.06.2022, when the instant writ petition was filed. It is, thus, evident

that while there was enormous delay on the part of the respondents in processing the

release of payment in favour of the petitioner, the inaction on the part of the

petitioner had also contributed to the delay. There is not even an iota of explanation

in the writ petition as to the reason why the petitioner could not have approached

this Court at an earlier date. Under ordinary circumstances, this Court would decline

relief to the writ petitioner only on the ground of delay. However, considering the fact

that the petitioner is a cancer patient and in view of the submission made by the

learned senior counsel for the petitioner that his client had been practically confined

at home for over a decade due to various ailments suffered by him, this Court is not

inclined to non-suit the petitioner merely on the ground of delay. The petitioner

cannot, however, claim benefit in terms of payment of interest for the period during

which he had failed to pursue appropriate legal remedy for realization of his

contractual dues.

34. I find from the record that it was only on 16.10.2017 when the petitioner had

served a legal notice upon the respondents demanding release of his claim. It also

appears that pursuant to the legal notice his claim was examined by the authorities

and a recommendation for release of the payment was made on 02.04.2019. By the

communication dated 02.04.2019 the petitioner’s claim for award of interest was

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rejected. But the communication dated 02.04.2019, to the extent it rejects the claim

for payment of interest has not been assailed in this writ petition. Having regard to

the peculiar facts and circumstances of the case, this Court is, therefore, of the

opinion that the petitioner cannot claim interest for any period prior to 02.04.2019 i.e.

the date before which his claim for release of the principal amount was

acknowledged by the departmental authorities. However, having acknowledged the

claim of the petitioner and having recommended release of the payment, the

respondents did not have any justifiable ground to withhold the payment due to the

writ petitioner. Section 34 of the Code of Civil Procedure also empowers the court to

award interest on the principal sum from the date of the suit in addition to interest for

any period prior to institution of the suit. This Court is, therefore, of the opinion that the

writ petitioner will be entitled to claim interest on the unpaid due with effect from

02.04.2019 till realization.

35. In so far as the argument of Mr. Roy, learned senior counsel for the

respondents, to the effect that the petitioner cannot claim any benefit out of the

letter dated 02.04.2019, the same being an inter-departmental communication, I am

unable to accept the said submission of Mr. Roy simply on account of the fact that

the letter dated 02.04.2019 itself mentions that the same was issued as per direction of

the Zonal Grievance Redressal Cell for issuing a speaking order for settlement of the

claim of the petitioner and the copy of the said communication was also marked to

the writ petitioner.

36. Since this Court has already held that this is not a case involving a contractual

dispute simplicitor but arbitrary inaction on the part of the respondents in their failure

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to release the payment of the writ petitioner, hence, the argument advanced by the

learned senior counsel for the respondents that the petitioner having failed to

challenge the consequential order after termination of the contract would be

debarred from seeking any relief, also stands rejected. In view of the above, the

decisions relied upon by Mr. P. K. Roy, in the opinion of this Court, would not have any

bearing in the facts and circumstances of the present case.

37. It is trite law that award of interest in a writ petition comes within the ambit of

discretionary jurisdiction of the Writ Court. Having regard to the special facts and

circumstances of the case and balancing the equities, this Court is of the opinion that

although the claim of the petitioner is a very old one, yet, the prayer for award of

interest made by the petitioner can be considered only with effect from the date on

which his claim was acknowledged by the respondents i.e. 02.04.2019. That apart, this

Court is also of the opinion that ends of justice would be met if interest at the rate of

9% per annum is directed to be paid on the unpaid dues of the petitioner calculated

from 02.04.2019 till the date of realization of the amount.

38. In view of the above, it is hereby directed that the respondent Nos.1 to 8 will

ensure that the principal amount and the security deposit of the writ petitioner

amounting to Rs.3,80,200/- (Rupees Three Lakhs Eighty Thousand Two Hundred only)

be released within a period of 30 days from the date of receipt of a certified copy of

this order along with interest calculated at the rate of 9% per annum with effect from

02.04.2019 till the date of realization. It is made clear that if the amount is not released

within 30 days from the date of receipt of a certified copy of this order, then in

addition to other consequences that may ensue on account of violation of this

Order downloaded on 24-12-2024 06:51:09 PMPage No.# 25/25

Court’s order, the respondents shall also have to pay additional interest calculated at

the rate of 12% per annum on the unpaid dues from the date of default of this order

till realization.

39. This Court is also of the opinion that due to the delay and inaction on the part

of the respondents in releasing his contractual dues the petitioner has been made to

suffer harassment and mental agony. As such, the petitioner would be entitled to be

suitably compensated for the said purpose as well.

40. This writ petition is, therefore, allowed to the extent indicated above with a

cost of Rs.1,00,000/- (Rupees One Lakh only) to be paid by the respondents to the writ

petitioner along with the principal amount, as directed above.

This writ petition stands disposed of accordingly.

JUDGE

T U Choudhury/Sr.PS

Comparing Assistant